Kentucky legislators have passed House Bill 904, a comprehensive gambling initiative that raises the minimum age for sports betting to 21. This bill also enhances the regulation of fantasy contests and other gaming activities, and it is now awaiting the approval of Governor Andy Beshear.
The Senate approved the legislation with a vote of 24-13, following a unanimous committee endorsement and a 64-19 vote in the House. Lawmakers have the option to override a veto during the final days of the legislative session.
Under the new law, the age for sports wagering will be increased from 18 to 21, while fantasy contests and horse race betting will remain accessible to individuals aged 18 and older. Additionally, the legal age for charitable gaming will also be set at 21.
This legislation marks the first time fantasy betting contests will be legalized, regulated, and taxed under the Kentucky Horse Racing and Gaming Corporation. It will also permit racetracks to offer fixed-odds wagering alongside traditional parimutuel betting.
The bill introduces oversight for prediction markets, which are platforms where users can trade event contracts. However, it does not impose an outright ban on these markets due to federal jurisdiction. Licensed operators, including racetracks, will be prohibited from offering such bets, particularly on election outcomes.
State Representative Michael Meredith noted that federal regulations limit the extent to which the state can impose restrictions on prediction markets. He pointed out that underage betting is primarily an issue in this sector due to the lack of federal restrictions.
Furthermore, the bill imposes limits on proposition bets involving college athletes, prohibiting wagers on negative performance outcomes while allowing bets on positive achievements.
Operators will be required to verify user identities and locations through geolocation tools and implement measures to prevent fraud, abuse, and money laundering. Participants such as athletes, coaches, and referees will be barred from contests related to their sports.
The legislation also prevents individuals who are behind on child support payments from placing bets, mandating operators to check a registry of arrears.
Lawmakers have established a tiered licensing system with initial fees ranging from $7,500 to $15,000, and annual renewals between $5,000 and $10,000. Fixed-odds horse racing bets will be taxed at rates of 9.75% in-person and 14.25% online, with proceeds directed towards regulation, problem gambling services, the state pension system, and a purse stabilization fund.
This bill emerges as Kentucky's betting market continues to grow, with wagering activity increasing by 54% year-on-year in February 2025. An NCAA survey indicated that 58% of individuals aged 18 to 22 have participated in sports betting, noting that the legality of betting and age restrictions do not significantly hinder engagement.
Despite this growth, some lawmakers have expressed concerns regarding the social implications of gambling. State Senator Chris McDaniel characterized sports betting as a “genie ... out of a bottle,” voicing his apprehension about its impact on society.
McDaniel remarked, “I now tell my sons that if you download one of these apps ... You’re a sucker. If you want to talk about a wealth transfer from those who can least afford it ... Unfortunately, it’s become this.” He added that his enjoyment of watching sports has diminished, feeling as though he is witnessing a gambling show rather than a game.
The Senate discussions also raised worries that restrictions on prediction markets could negatively impact the broadcasting of the Kentucky Derby, a significant economic driver. Senate Democratic leader Gerald Neal cautioned that limiting broadcasts would be akin to “sticking a gun up your own head, economically.”